Volunteering and the Strategic Value of Ignorance

41 Pages Posted: 28 Apr 2011

See all articles by Florian Morath

Florian Morath

Department of Public Finance, University of Innsbruck; Max Planck Institute for Tax Law and Public Finance

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Date Written: April 27, 2011

Abstract

Private provision of public goods often takes place as a war of attrition: individuals wait until someone else volunteers and provides the good. After a certain time period, however, one individual may be randomly selected. If the individuals are uncertain about their cost of provision, but can find out about this cost ahead of the volunteering game, a strategic value is attached to the information, and individuals may prefer not to learn their cost of provision. If the time horizon is sufficiently short, in equilibrium only one individual may acquire information about his cost. For a long time horizon, acquiring information is strictly dominant. The time limit is an important instrument in influencing the efficiency of the volunteering game.

Keywords: war of attrition, volunteering, discrete public goods, asymmetric information, information acquisition

JEL Classification: H410, D440, D820, D830

Suggested Citation

Morath, Florian, Volunteering and the Strategic Value of Ignorance (April 27, 2011). CESifo Working Paper Series No. 3419, Available at SSRN: https://ssrn.com/abstract=1824227

Florian Morath (Contact Author)

Department of Public Finance, University of Innsbruck ( email )

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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